Plese see below from the manual. Make sure Killdry is off, unless you have a parallel effects loop
Killdry – Send/Return Loop
If you’ve connected SPACE using an effect send/return loop (either your amp’s or a mixer’s), SPACE’s Killdry feature can be enabled. When Killdry is enabled, SPACE does not send any dry signal to the outputs; only the Effect. Note that when Killdry is enabled, Bypassing will mute the Effect rather than Bypass it when DSP Bypass is selected. Killdry’s factory default is disabled.
It can be enabled in the [BYPASS] menu of the System Mode. Here’s how:
1) Press and hold the Encoder and Right Footswitch simultaneously for a few seconds to enter System Mode.
2) Turn the Encoder until [BYPASS] is displayed.
3) Momentarily press the Encoder.
4) Turn the Encoder until [KILLDRY] is displayed.
5) Momentarily press the Encoder.
6) Turn the Encoder to select either [YES] or [NO].
7) Press and hold the Encoder and Right Footswitch simultaneously for a few seconds to exit System Mode.